Gold-futures
GOLD - bullish revengeWave C has been formed, so bulls are likely going to deliver an upward impulse wave
NFP - How Will Gold React to Non Farm Payroll?Good Evening Traders!
Well, here we are again, Gold trading just above the 1250 mark. Today was a solid day down, with Gold trading 16.7 points off the opening to close at 1253. We have come right to the top of this support area that was last seen on June 24, the day the British approved Brexit, and the day when Gold rallied 108 points in 1 day!. It's amazing isn't it how these cycles play out; 3 and a half months later and we are on the verge of another volatile day, but this time its Non Farm Payroll Friday.
As you can see in the chart, we have been riding the extreme edge of the Bollinger Bands. And as we know, this is not a sustainable situation as price will almost always pull back from such extremes. You can also see on the Stoch RSI that the green signal line has final crossed over the magenta line. While this doesn't necessarily mean that the down cycle is over and that price will reverse, it does give us a clue that it might happen soon. And given Non Farm Payroll day, the safest play might be to go to cash and protect your profits.
To recap, the 3 main factors to thinking that the pullback might be over are:
Price has spent 3 days on the outside edge of the outer Bollinger Band
Price is right at the upper edge of a major support zone
Stoch RSI signal line has started to cross above the magenta line
Following my own advise, I am closing all of my current short position except for 1 contract which will be a runner. With the stop at set at break even, it's a very safe play.
Safe Trading and Protect those Profits!
Today's Doji after Yesterday's Extreme Move Down.Good Evening Traders!
Well, after yesterday's explosive move down, it's not surprising that Gold took a pause today. With a total range of 15.3 points, the net down move today was 1.9 points. I did take a new short position early in the morning and I'll get to that later in this post. I'm expecting volatility to come back into the market tomorrow and Friday as there are a couple of big news events. Tomorrow at 4:30 am PST is the ECB Monetary Policy Meeting Accounts. With Brexit on everyone's mind, this will be an interesting event to say the least. This is followed an hour later by the US Initial Jobless Claims report at 5:30 am PST. And then on Friday is our friend, Nonfarm Payrolls, at 5:30 am PST. These events are almost guaranteed to get the markets moving again, perhaps finishing off the downward cycle in Gold.
Now on to my trade. As I mentioned yesterday, I was waiting for a good pullback in Gold so I could re-enter and catch another wave to the downside. Using the hourly chart, at 5 am, price came up, penetrated the upper BB and then the next hourly candle failed to take out the high. Also, the Stoch RSI was in overbought territory. While not a picture perfect pullback, with a tight stop, the risk was containable. For my profit target, I am using a weekly chart and the lower BB which is at 1243.50.
Hopefully, we'll end the week with some good movement to the downside.
Safe Trading and Protect Your Profits.
Hourly Chart
Weekly Chart
Gold Blasts Through All Major Support LinesGood Evening Traders!
I've been calling for the bottom of the current cycle and last night I pointed out that there was major support below my current Gold short @ 1305. There was the upward trend line dating back from January, the channel bottom from July 1, and the bottom BB Band (2.0 Std Dev), all sitting right at 1305. This was also confirmed by a Stoch RSI that was about to break below 20, signalling the possible end of this latest downward cycle. I went to bed last night confident that my final profit target of 1305 would be hit in the morning, ending my latest short that started at 1331.
Well, boy did I have a surprise when I woke up in the morning! I mean, price didn't even hesitate at the 1305 level. It blasted right through 1305, 1300 and there was no stopping it. If you look at any shorter time frame, you will see that this move down was dramatic and without any real pause or pullback.
In my post last night, I stated that the Stoch RSI is not a binary indicator. This means that just because it is oversold or overbought, doesn't mean that the cycle is over. The indicator can stay in these oversold/bought conditions for quite a some time. Look at the chart below. I've called out the period in late August when the Stoch RSI stayed oversold for over a week while price continued to move down.
If you're thinking of going long, I'd recommend waiting for the Stoch RSI green line to break above the 20 level and cross over the magenta line. If you want to go short, you can wait for a pullback. The bottom BB is at 1283. That could be a good entry point. That is, if price retraces that much.
Trade Safe and Protect Your Profits!
Gold Continues to Move Down and Closer to Major SupportHello Traders!
Friday's price action was very favorable for our existing short position and price moved off the long standing support trendline (magenta line) and further away from the BB midline. If you remember what I said earlier last week, the downward cycle as shown by the Stoch RSI still needed more time to complete and I thought that presented another few days of downward price action. As the Stoch RSI has not yet completed it's cycle down, I think that Gold will continue to be under setting pressure for another few days.
I will say that this is in no way a done deal as price is moving into an area filled with multiple levels of strong support. The first is the dotted magenta line which is the bottom of this wedge pattern. Notice how it is right at the same level as the second BB which is the 1.5 Std. Dev.
You also have the bottom of this very old channel that has been in place since July 1. That's the cyan line. And then of course is the lower BB, the 2.0 Std. Dev. @ 1306.6. Finally, there is this long support line @ 1305 which I have drawn in dotted green. You can scroll back in time and see that this has been a critical area of support and resistance dating back to March 2014, and more recently has acted as support 3 times since July. Can it hold up a fourth time? It might but also remember that today's support is tomorrow's resistance! Eventually, all S&R levels do break down. I am not saying this level won't hold, one way or another. Instead, let's see how the price action unfolds if, and when, price gets to that level.
Until then, safe trading and protect your profits!
Gold Breaks Support Line but Ends Day Back Above ItGood Evening Traders!
Early morning trading saw Gold break through the long acting support trend line from January, 2016 but then pop back up to end the day above it. The move down was enough though to hit my first profit target @ 1320 where I took off half my position for a nice profit of 11+ points. It is interesting to note that price touched the BB midline at the high of the day and also touched the inner most BB (1.0 Std. Dev) at the low of the day.
With this kind of price action, it's hard to read which direction gold wants to go. My only clue right now is that the Stoch RSI still has more downside potential before I would conclusively say that the downward cycle is over. In a purely protective measure, I've moved my stop to 1309, break even on my remaining position.
Safe trading and protect those profits!
Gold Hitting Support - Will it Bounce or Break Through?Good Evening Traders!
Our Gold short trade made progress today. Unfortunately, it ran into the long running upward support line (the solid magenta line) at the low of the day @ 1321.1. Price then rebounded right up to the BB midline in early evening trading. It has since come back down as I write this. If price can break through that magenta support line, we could see further price erosion to the 1.0 BB @ 1318.30. Below that is the outer wedge (dashed magenta line) which is at the same level as the 1.5 BB @ 1312.40.
So those are the short side price targets as I see it. The Stoch RSI appears to have a couple of days of downside left before cycling back up. Let's see where we are by the time the market opens in the morning.
Safe trading and lock in those profits!
Gold Fails to Extend HigherGood Morning Traders,
The last 3 days saw 3 dojis (red highlighted rectangle) and failed to break the long down sloping channel top that dates back to July 1, 2016. If you remember from my post last Friday, I was concerned about the big gap from the day after the FOMC and that it would need to get filled before price could move higher. Well, today we got the gap filled, and more. As a result, I closed my long Gold trade at 1332.10 for a solid 10 point profit. While I was 'anticipating' a larged move higher, I trade what I see, not what I think! And remember, protect your profits!
Here is what I see now. The Stoch RSI has broken below the 80 line. Also, those 3 dojis over the last 3 days show that price could not even touch the outer BB. The same price action happened on the last up swing. All combined suggests that price is going to go lower before it goes higher. As a result, I entered a short trade on Gold @ 1333.1.
I am watching some key support levels below. First is the midline of the BB. Price is currently hovering at that level. And below that there is the long term support trendline.
Price has not been able to break out of the outer BB in the last few cycles. I will be trading the small range for quick profits until there is a breakout on either side.
Safe trading and lock in those profits!
Gold Moves Up after FOMCGood Evening Traders!
Janet Yellen and the FOMC delivered good news for Gold bulls today and tabled a September rate increase just as everyone predicted. As a result, the US $ declined and stocks and Gold advanced. This was good but not great for our long Gold position. Given that we have been trading in this contracting channel since July 1, I (and everyone else!) were expecting an eruption of gold and a definitive breakout from this tightening range. Well, not today. If this could not shake gold from the summer doldrums, you have to wonder what can?
Let's look at the chart. We now have a series of lower highs and higher lowers, forming a new wedge. We also have a wedge formed from these lower highs and the long ascending trendline. A wedge within a wedge. If tomorrow sees a red down candle, then the price compression is likely to last another week or two, extending out to the apex of either wedge.
We also have a gap in play between yesterday's close and today's open. Knowing that all gaps do get filled, if price does move up tomorrow, I feel that the bullish move will be somewhat muted. Price could move up for a couple days and hit the outer BB but then come right back down and fill the gap. Because of this, I am lowering my first Profit Target from 1358 to 1349.50. Remember, Bulls make Money, Bears make Money and Pigs get Slaughtered!
Stay safe and protect those profits!
Gold - Long on Potential Head and ShouldersGood evening traders! As you all know, I was short from 1341.8 and looking for price to hit my target of 1305 1.64% . Well, Sunday night's price action was aggressive to the up side and I decided to close my trade and take my profits for a solid 23.1 points. At the same time, I began building my long position, taking a 1/2 stake in Gold 0.09% @ 1317.90.
On the chart I have circled the 3 points that make up the potential head and shoulders. While the head is not that far below the left shoulder, it's enough for me! Especially if the current right should continues upwards. It is also creating a very large double 'W' pattern.
The Stoch RSI is also confirming a move higher. The first thing to look for is that the cycle is at the bottom. The second is if the green line has crossed above the magenta line. Both are true here.
If price does pull back, I will add to my long.
As always, please I look forward to your questions and comments.
Safe trading!
Gold - The Week in Review - 9/16/2016Hello Traders! Thanks for joining me for this edition of Gold - The Week in Review .
Last week we initiated a Gold short on Thursday @ 1341.8 and price moved down for the rest of the week. In fact, Friday's candle crossed and closed solidly below the midline of the range. Monday continued the bearish movement as price gapped down at the opening, closing at the cyan BB (1.0 Std Dev). Confidence in our bearish sentiment was high.
Even though price moved up sharply and closed Monday's gap to start trading on Tuesday, price could not extend past the midline, reversed and created a beautiful outside down candle to end the day. The next day, Wednesday, was the only up day of the week but it was a weak candle as price clung to the cyan BB and hinted at more downside movement to come.
In addition, Wednesday was the only day where the 2 supporting indicators were temporarily out of sync. The Stoch RSI continued moving down but the On Balance Volume had a slight rise to the upside. This was short-lived though as both indicators got back in sync on Thursday which saw a second down outside bar in just 3 days. Price closed under the Cyan BB after briefly touching the next down Blue BB (1.5 Std Dev).
As trading started on Friday, and with my first Profit Target is 1305, I had fully anticipated price hitting that level before the end of the day. But try as price might, it was not able to push down and touch 1305. Although it was a good down day, price ended the week at 1310.2.
Outlook for Next Week
The big event next week is the FOMC on Wednesday. There is only an 18% chance of a rate hike at the moment according to industry analysts . While no rate hike would be seen as bullish for Gold, I'd like to see gold move down to the big area of confluence at 1300 - 1305 to complete the downward cycle before potentially resuming the bull move up to new yearly highs. If you look at the chart, you can clearly see the lower Red BB, the 100 Day Moving Average and the bottom of this channel that dates back to 7/1 of this year all converging in this area. In addition, all cycle indicators are at the bottom end of their ranges. Is see this lining up for a few days of slow to moderate movement as price flatens out at the bottom and gets ready for the next leg up.
On the other hand, if Gold continues to move lower, we could see a breakout to the downside and the start of a new bearish trend. This is supported by the weekly chart. Notice how price closed the week below the midline, a very bearish sign. If a downtrend does continue, look for Gold to hit the Cyan BB @ 1276.4. This is my second Profit Target.
In any event, expect fireworks on Wednesday, regardless of what the news is. Trade the event, not the actual news!
Good luck and profitable trading!
Another Outside Bar on GoldToday saw another outside bar on Gold COMEX:GC1! as price moved closer to my first PT of 1305. That's 2 outside bars in 3 days. And the outside bar today was bigger than the one on Tuesday. All indicators still pointing down. Let's see if price can break below 1300.
Gold is Sideways but Still Showing WeaknessCOMEX:GC1! Even though today had a green candle, the Heiken-Ashi daily chart is still all red: And the hourly chart shows that today was a slow grind up but that price was unable to break above the upper BB. The yellow circles highlight that 1. Price will hit the lower BB, 2. The Stoch RSI is moving down and 3. OBV has been severely squeezed.
Maintain Gold Short - Bearish ChartYesterday, 9/12, saw continued downward movement in Gold futures. While that was good for my short position (in at 1341.8), I was concerned because of the gap up at the close of day (#1). But here is why I stayed short and didn't close my position (reference the yellow circles on the Stoch RSI and OBV).
1. Stoch RSI is is an obvious downtrend.
2. OBV continued lower and was still above the lower Bollinger Band.
This confirmed that there is still downward movement in the current cycle. The combination of these 2 indicators kept me in the trade. I will be watching closely to see how the OBV reacts at the lower BB and see if we get more follow through to the downside.
Main Chart Updated with Non-Correlated OBVI've added OBV to my chart as a non-correlated indicator. I did this because I wanted a volume indicator as recommended by John Bollinger. I've seen some people add a fast EMA to the indicator but I like how the Bollinger Bands show the extremes.
I've highlighted 2 examples.
1. Classic Divergence - As price exceeded the lower bollinger band in the price fall at the end of August, you can see the OVB make a higher low after it crossed below then back above the lower BB. A nice long trade followed.
2. The first day after Labor Day saw gold have a huge day up. As price hit the upper cyan BB (Std Dev 1.0), the OBV also showed all the buying pressure. That signaled the end of the buying as OBV dropped the next day. You can see that it preceeded the Stoch RSI crossover by a day. GC
Anantomy of My Chart and Overall Trading StrategyI want to take a few minutes and go over my chart and my overall strategy for trading gold futures.
Bollinger Bands - I use 3 BBs, set to a standard deviation of 1, 1.5 and 2. I pay particular attention to when price pierces the red 2.0 band. I am also always aware of price in relation to the simple moving average, the orange line in the middle of the bands.
As good as they are, BBs need to be used with a good cycle oscillator. This is critical to differentiate when price is trending and when price is reversing. For this, I use the Stochastic RSI. I have tried many oscillators but have found that the Stoch RSI, which is technically an indicator of the RSI indicator, works great with the BBs.
My strategy is pretty simple. Using a daily chart, I enter a trade after price has pierced the red BB and then pulled back, looking for a reversal candle. But by itself, this strategy will create many false entry signals and that's when I turn to the Stoch RSI. For a long entry, I want the green Stoch RSI line to move above 20 and cross the magenta line. For a short entry, I want the green Stoch RSI to move below 80 and cross the magenta line.
As examples, let me walk you through my logic for my last 2 trades. 12 days ago, price pierced the lower red BB (see arrow 1). This was the first sign that Gold was reaching oversold territory. But if you look below at the Stoch RSI, both green and magenta lines are clearly below 20 and are showing no indication of a change to an upward cycle. So no buy signal yet. The next few days had a mix of red and green candles but since the Stoch RSI was still below 20, I did not enter long. Finally, after 6 days, there were 2 solid green daily candles and the Stoch RSI moved above 20 with the green signal line crossing the magenta line. I entered a long trade at #2 at a price of 1324. I closed the long at 1344 for a 20 point profit.
Now, there were 2 main reasons why I closed the trade. First, you can see that at #3 on the chart, price tried 3 times to move above the higher cyan line (1.0 Std Dev) but failed.You can see how the upper candle wicks poked above the cyan line. To me, this was a big sign of weakness. Second, the Stoch RSI green line hooked below 80 and crossed the magenta line. Not only was the price action telling me that upward movement was not going to happen, but the cycle oscillator was confirming this. I placed my stop a couple of points above the 20 period simple moving average and was stopped out.
Just after closing the long position, at the start of the last day on the chart, I entered a short position using the same, but now opposite, reasoning. My entry price was 1341.8 and I am still in the trade.
I hope this has helped explain how my chart is set up and my basic logic for entering and exiting trades. I look forward to your comments and questions.
StocRSI Crossover Signals Short Gold FuturesThe StocRSI indicator is rolling under 80 and that coupled with prices failure to extend past the 1.0 Std Dev BollingerBand (cyan) after 3 days confirms a short sell of the gold futures contract.
You can see the upper wicks penetrated the cyan BB but price could not close above it. You can also see the green StocRSI line move down under 80.
Keep an eye on the BB midline (orange). That could provide some support at 1337.7.
Last top in XAUUSDTge gold is about to form new high as wave 5. The gold will fall in bearish mood once the red trendline broken.
Saturated MarketCOMEX:GC1! The gold market is saturated by six days, be wary not to lose short timing with higher profit
